EMV

You have probably heard of the US migration to EMV by now. Like everyone else, you most likely have some questions on what exactly EMV is and how it can benefit both cardholders and merchants.

In short EMV, which stands for Europay, MasterCard and Visa, adds dynamic data to the transaction process using a secure chip embedded in the card to prevent skimming and other fraudulent practices. With the shift in liability to merchants in 2015 and 2017 who have not adopted EMV payment technology, it is important to know what benefits EMV offers.

1. Reduction in card fraud


As a cardholder and a merchant, EMV cards can greatly reduce your exposure to fraudulent purchases. How does that little chip do it? Well there are three areas in which that little chip boasts some great security tactics. This robust chip secures each transaction using card authentication, cardholder verification and transaction authorization.

Card authentication helps prevent the use of counterfeit cards by creating a dynamic cryptogram that is used to validate the card either online by the issuer or offline with the terminal. Also, unique transaction data is created for each transaction. This means that any data sniffed or skimmed can not be used to generate additional transactions.

Cardholder verification is the authentication of the cardholder using four methods, offline PIN, online PIN, signature, or no cardholder verification method. The issuer then uses this information to prioritize the cardholder verification method based on the associated risk such as the amount of the transaction.

Lastly, EMV uses transaction authorization similar to current magnetic stripe cards, however in that little powerful chip are issuer-defined rules. The rules are used during an offline transaction to determine if the transaction can be authorized. In an online mode, transactions act like they currently do with magnetic stripe cards. Transaction information and a transaction specific cryptogram is sent to the issuer and is either approved or declined.

2. Where your info is stored


Another great benefit to an EMV card is where it stores your information. Unlike magnetic stripe cards, EMV cards store your payment information in a secure chip using issuer-specific keys. This means that it is almost impossible to duplicate an EMV card as you see done with magnetic stripe cards.

3. Pay Anywhere


Another benefit of EMV cards is that they have interoperability with the global payments infrastructure. This means that consumers with EMV chip payment cards can use their card on any EMV-compatible payment terminal. Additionally, the migration to EMV cards helps prepare for NFC mobile contact-less payments.

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